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UPI Payment Charges Latest News: UPI to remain free. Modi Govt not considering any charges on UPI services

UPI Payment Fees Latest News: The government is not considering any fees for UPI services, the Treasury Department clarified today. The ministry said UPI service providers’ concerns about cost recovery should be addressed in other ways. It also noted that UPI is a digital public good with tremendous convenience for the public and productivity gains for the economy.

“UPI is a digital public good with enormous convenience for the public and productivity gains for the economy. There is no consideration in the government to charge for UPI services. Service providers’ concerns about cost recovery need to be addressed in other ways. The government had provided financial support to #Digital Payment ecosystem from last year and has also announced it this year to encourage further adoption of #Digital Payments and promotion of payment platforms that are economical and easy to use,” said the Treasury Department in a series of tweets.

The clarification from the Ministry of Finance comes days after the Reserve Bank of India (RBI) requested public feedback on UPI payments and fees.

“RBI has not issued any instructions regarding fees for UPI transactions. The government has mandated a zero-load framework for UPI transactions with effect from January 1, 2020… This means that the costs in UPI are nil for both users and merchants. Since the intent of this discussion paper is to get general feedback, a few questions have been included about which approach to take,” RBI said in its Discussion Paper on Charges in Payment Systems.

Also read: New RBI Proposal: Fee up to Rs 25 on NEFT Transactions Initiated through Bank Branches

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While UPI as a money transfer system is similar to IMPS, the discussion paper said, “Therefore, it could be argued that the charges in UPI should be similar to the charges in IMPS for wire transfer transactions. A tiered surcharge may be imposed based on the different tonnage bands.”

Questions for feedback

The discussion paper shared the following questions for public feedback:

  • Is subsidizing costs in the context of zero load a more effective alternative?
  • If UPI transactions are charged, should MDR be a percentage of the transaction value or should a flat fee be charged regardless of the transaction value?
  • If costs are introduced, should they be managed (e.g. by RBI) or determined by the market?


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